Brady, Quinn battle over tax-hike report

Friday

Jul 30, 2010 at 12:01 AMJul 30, 2010 at 2:58 AM

A published report that Gov. Pat Quinn’s budget director expects the General Assembly to approve an income tax increase in January created a firestorm of criticism from Republicans Thursday, including gubernatorial candidate Bill Brady.

Bernard Schoenburg

A published report that Gov. Pat Quinn’s budget director expects the General Assembly to approve an income tax increase in January created a firestorm of criticism from Republicans Thursday, including gubernatorial candidate Bill Brady.

Budget director David Vaught was quoted on Bloomberg.com as predicting Illinois' individual income tax rate, now 3 percent, will be hiked to 5 percent.

If the idea is passed, Brady said, he'll try to roll it back.

"If I’m fortunate enough to be elected at the next governor of Illinois, I will use every available option at my disposal to stop this tax hike dead in its tracks,” Brady said in a news release.

But Quinn, a Democrat, said Vaught, was “misconstrued” as he discussed competing plans that have been considered by legislators. The governor said he remains committed to a 1 percentage point increase in the income tax for education.

If that increase is blocked, Quinn said thousands of teachers will have to be laid off and local property taxes are likely to go “through the roof.”

‘Substantial’ increase expected

Vaught was quoted on Bloomberg.com as saying, “We’re going to pass a tax increase in January. … We expect it is going to be substantial.”

The Bloomberg story also paraphrased Vaught as saying the General Assembly failed to address the deficit this year because of the November election. However, he said, according to the article, lawmakers in January “probably will increase the individual and corporate tax rate to 5 percent … generating $6 billion of new revenue.”

In a Chicago news conference on another subject, Quinn told reporters the best way to move Illinois forward is to have the state provide adequate funding to education, which would also take pressure off local property taxes that now provide most of the money.

Quinn said he had the “fortitude” to propose the new state income tax increase for schools, and he is disappointed that the General Assembly hasn’t acted on that plan.

“There are those who think you can do everything for free,” Quinn said, noting that Brady has called for a 10 percent reduction in state spending.

Rikeesha Phelon, spokeswoman for Senate President John Cullerton, D-Chicago, said Thursday Cullerton is on the record in support of a tax increase to pay bills. “That hasn’t changed,” she said.

House action needed

However, she said, the Senate president “is still waiting for the House to act on the bill that Senate Democrats passed last year.” That plan would raise both the individual and corporate income tax rates to 5 percent. It would raise about $5 billion for the state, but also provide $700 million in property tax relief.

Steve Brown, spokesman for House Speaker Michael Madigan, D-Chicago, said Madigan believes any revenue increase “would have to have a bipartisan coalition to pass,” meaning some votes would have to come from House Republicans.

House GOP Leader Tom Cross issued a statement Thursday that provided no hint that such a coalition is about to form.

“It is shocking to me that Governor Quinn’s administration remains fixated on an income tax increase by 67 percent, and not focused on reforms and streamlining government,” Cross said. “Taxpayers are sick and tired of paying for the Democrats’ flippant behavior when it comes to their money.

The Bloomberg article stated that Illinois state government is under pressure from companies that rate municipal bonds to demonstrate that it has the political will to address its $13 billion deficit for the fiscal year that began July 1.